KenGen Records Longest Winning Streak in 3 Months: Nairobi Mover

Kenya Electricity Generating Co.,
the East African nation’s biggest power producer, gained for a
fifth day, marking its longest winning streak in three months,
as plans to boost electricity output attract foreign investors.

Shares in the Kenyan bourse’s second-best performer this
year advanced 3.7 percent to 16.90 shillings by 2:21 p.m. in
Nairobi, the longest stretch of increases since April 2 and the
highest intraday level since June 13. Almost 700,000 shares were
traded, or 1.5 times the three-month daily average.

The country has power capacity of 1,600 megawatts against a
peak demand of 1,500 megawatts, which is growing at an average
rate of 8 percent a year, according to KenGen, as the company is
known. It produces 1,232 megawatts, while four private producers
generate the remainder.

“KenGen is enhancing capacity to 3,000 megawatts by 2018
and will produce power at a lower cost,” Halima Saadia, a
research analyst at Old Mutual (OML) Securities Ltd., said by phone.
“The demand is there and by producing more energy at a cheaper
cost the company will benefit.”

Old Mutual has a price target of 22.25 shillings on KenGen.
The company was rated a strong buy in new coverage at the
Nairobi-based brokerage on July 8. KenGen’s price-to-earnings
ratio is 13.2.

“It’s foreign investors who are moving the stock,” Saadia
said. Shares in the company have rallied 92 percent this year,
compared with a 29 percent gain on the FTSE NSE 25 Share Index.